“Mr Abe may be burning to give Japan a more normal foreign policy, but what it needs most is a more normal economy. His signature policy—Abenomics—is far from complete. The fiscal and monetary expansion, his first two “arrows”, were supposed to buy time for the third and most important one: sweeping structural reforms, leading to enduring growth. The economy should take precedence over constitutional reform… Otherwise, Mr Abe will be remembered less for his long tenure than for wasting it.”

Two of Shinzo Abe’s “arrows have hit their targets, jolting the Japanese economy back into life…. By contrast, Mr Abe’s third arrow promising structural reforms has been stuck in the prime minister’s quiver.”

The U.S. stands to benefit if Abenomics succeeds in strengthening its key ally in Asia. Prime Minister Abe’s first two arrows have hit their marks. The third yet-to-materialize arrow, however, has by far the hardest target of tackling the entrenched “source of Japan’s woes: a vast web of regulations, subsidies and trade barriers whose net effect has been to support inefficient sectors, and the voters who live off them, at the expense of growth and innovation. Japanese productivity has remained essentially flat for the past two decades, a dangerous state of affairs in a country with a shrinking labor force and a growing dependent elderly population.”The U.S. stands to benefit if Abenomics succeeds in strengthening its key ally in Asia. Prime Minister Abe’s first two arrows have hit their marks. The third yet-to-materialize arrow, however, has by far the hardest target of tackling the entrenched “source of Japan’s woes: a vast web of regulations, subsidies and trade barriers whose net effect has been to support inefficient sectors, and the voters who live off them, at the expense of growth and innovation. Japanese productivity has remained essentially flat for the past two decades, a dangerous state of affairs in a country with a shrinking labor force and a growing dependent elderly population.”